Most of these problems are not appearing all of a sudden, and when they are obvious, it is too late. That makes them difficult to manage. I believe that the key point is that such wrong behaviours should be disclosed before they become a problem. Each employee must feel able to speak about them before they become critical. There should be no cost at mentioning the potentiality of such wrong behaviour, no cost for the potential victim, and no cost for the only potential wrong doer.
I recommend having one HR person being in charge of receiving any complain about potential misbehaviour. Most of these complains should stay confidential and be managed as such. Such HR person is then in charge of damage control at no cost for the whistleblower (as long as he remains reasonable).
It is key to collect small mistakes or potential errors information before having to report a catastrophy. That gives a new responsibility to the HR people. Responsibility is better placed in HR hands than on the victims' shoulders for having kept a secret due to different kind of fears and threats.

Answered

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DeeptiLL

June 22, 2011 01:51 AM

Hi Pearl,

You will need to provide guidelines on what is acceptable behavior and what is not. Given that it would be difficult to capture all scenarios, you can also encourage people to come by to HR or their managers in case they are not sure whether a particular behavior is acceptable or not.

For the whistleblower's policy we had an ETHICS hotline number (toll free) that employees could call and also an Ethics review committee that would go over the cases and conduct reviews. The review committee consisted of the VP-HR, VP-Legal and one of the Sr. Mgmt members.

We also mentioned that if an employee is involved in any of these aspects- sexual harassment, fraud, inappropriate behavior , he may be liable to be dismissed from work, be handed over to law enforcement authorities as deemed fit by the Ethics committee based on what they have reviewed and determined.

Thanks for your inputs. If I were to be putting a policy manual/framework in place, the document would also require to state what would be the process to tackle an issue if and when brought to notice..correct? I believe there are certain legal implications naturally so I do not have the expertise in this area and would appreciate if you could suggest me reference material that would help me draft this policy/manual.

Also what are other aspects that can be covered in a corporate governance framework - other than let's say a whistleblower or inappropriate behaviour or company information disclosure clause etc.

Answered

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DeeptiLL

June 22, 2011 08:48 AM

Hi Pearl,

You may want to include the following sections in your policy-

Communication- Open Door Policy
Conflict of Interest
Employment of relatives
Code of ethics
Code of conduct
Anti-Fraud
Whistle Blower Policy
Acceptance of gifts
Confidentiality/Invention assignment
Drug and Alcohol Abuse
Sexual Harassment- There is a complete guideline for sexual harassment as
per Indian law where you have to have a committee with an external person as
the chairperson of the committee- either a lawyer or a HR professional. You
will have to use the guidelines that have been drafted as per law in your
handbook for this particular section.

You will have to come up with your own guidelines based on what the company
needs are.Violation of Company policies and rules and/or engaging in
misconduct normally calls for some form of disciplinary action. Disciplinary
action may include any of the following: verbal warning, written warning,
unpaid suspension, and/or termination.

Normally the committee would review each case and determine the appropriate
action. Sometimes they may not follow the steps of verbal and then written
warning, but skip a few steps depending on the severity of the issue. There
may also be times when management may decide to repeat a disciplinary step
as well. All this is something that you would need to discuss with your team
internally and draft the policy.

I am a former HR person managing the whistleblower hotline and ethics program for a global manufacturing company. The answers to your questions may be different if you are a private or public company. If public, and depending upon where your stock is listed, there are likely to be many corporate governance requirements beyond the HR topics you listed above. For companies listed in the US, the SEC and NYSE websites have some good guidelines.

If you are entertaining the establishment of a whistleblower hotline, I recommend that you think about outsourcing this, especially if your organization operates globally. Many European countries have very stringent guidelines about what can be reported to a hotline (oh yeah, and don't use the word hotline in your naming -- especially in EU), anonymity, and where the information goes. For instance, if a complaint comes in about sexual harassment in Ireland, the subject has the right to be given the report, contest the allegations, and if unsubstantiated, have his/her name redacted from the report and investigation files.

The hotline vendor that I chose and have renewed with twice is Global Compliance out of Charlotte, North Carolina. In four years, I have had no interruption of service, they partner very well on a global program, and offer a variety of options to manage costs. They are also very good advisors when laws change.

One thing about a whistleblower policy is that you need to be sure that management completely buys in and understands what no retaliation means. Because if you are going to be struggling with managers to tread lightly on someone who has raised ethical concerns, in my opinion you are better off without a specific policy. I would recommend you imbed the language in the appropriate policies (e.g., sexual harassment, discrimination, fraud, etc.).

Hope this helps. Feel free to reach out directly if you want any more information.